If they had their way, analysts would have access to more information about banks' derivatives holdings and be privy to detailed discussions of their risk management philosophies.
"It would be helpful to show on- and off-balance sheet information together," said Diane B. Glossman, vice-president of Salomon Brothers Inc. "They are not managed separately."
Ms. Glossman, who appeared on a panel at the Bank Administration Institute's asset, liability, and treasury management conference, also said she'd like to see a detailed discussion of risk management philosophy as a supplement to the numbers and raw data that analysts generally see.
"The numbers are important and we'd all like to see them. But the discussion portion is equally important," she said.
Sally Pope Davis, a vice-president at Goldman Sachs, said more detailed disclosure of derivatives holdings would make her job a lot easier.
"A table on derivatives which actually goes into the type of instruments you have and their maturities, credit risk, and what they are being used for is the one disclosure I think we'd all like to see," said Ms. Davis, acknowledging that it probably won't happen anytime soon.
She did say, however, that full disclosure is not as important to her as an analyst as knowing that banks are concentrating on their core business.
"I don't think full disclosure is necessary of every on- and off-balance sheet instrument," Ms. Davis noted.
"I'd rather see banks focus on making money in a consistent way rather than spending time breaking down a complicated balance sheet for investors."
Nancy E. Stroker, executive vice-president of Fitch Investors Service, said she wished banks would provide an evaluation of the market risk affecting their entire balance sheets.
"I'd like to see a company's tolerance for risk. It would be useful to see how it all blends together," she said.
The analysts also said that investors are now more interested in a bank's net interest margins than in credit quality.
Salomon's Ms. Glossman said that the stock of BancOne Corp., Columbus, for example, has recently been affected by investors' fears over the compression of their net interest margins due to their large derivatives portfolio.
"Investors believe margins ought to be maximized," Ms. Glossman said. "Net interest margins have limited impact in terms of derivatives runoff. Investors look at off-balance sheet instruments as temporary margin enhancements."
Goldman Sachs' Ms. Davis said investors are uncomfortable with banks that "take bets" with their portfolios.
"That's why they are uncomfortable with large amounts of derivatives usage," she said.
"You should explain your usage of swaps as hedging tools. Investors don't mind hedging, but they do mind excessive risk taking."